When Choosing Between Using Budgeted Rates, and Actual Rates, Which

question 71

Multiple Choice

When choosing between using budgeted rates, and actual rates, which of the following is TRUE?

• A)Actual rates let users know in advance what their costs are.
• B)When budgeted rates are used, users must wait till the end of the budget period to know what their costs are.
• C)With actual rates, a support department, rather than a user department, bears the risk of unfavourable cost variances.
• D)Budgeted rates based on user department estimates may lead to outsourcing needed work, rather than relying on an internal support department.
• E)Budgeted rates may help the manager of a support department to improve efficiency.

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